The Shady Crime of Embezzlement
The felony embezzlement is a crime against property. Whilst larceny is the crime of stealing possession of property, embezzlement is the crime of stealing ownership of property. The criminal takes lawful possession of the property, thus he cannot be charged with illegal possession, but he can be charged with unlawfully taking that possession – embezzlement. In cases of embezzlement the criminal takes the possession of another’s property, and converts ownership of it with an intent to defraud the owner.
Embezzlement is a crime committed by people in positions of trust who have the ability to take lawful possession of property. These include public officials, brokers, trustees, employees etc. These individuals then convert the ownership to take control of the property for their own benefit, and in so doing they go beyond the terms that their position of trust afforded them. Basically they are taking somebody else’s property. In criminal cases proving that the property belonged to another party can be tricky. For example, if the embezzler was a co-owner prior to the embezzlement it may be easier to prove fraud than embezzlement.
The intent to defraud must be present at the time ownership was converted. If the defendant believed they have a right to the property they could use a ‘claim of right’ defense and be acquitted. If the criminal had the intent to convert ownership as soon as they were trusted with the property then it may be the case that they are guilty of larceny by trick, rather than embezzlement.
Embezzlement is not considered to be one of the many types of computer crimes, but access to computer files is often a key part of embezzlement cases. Computer forensics are sometimes used as key parts of evidence, and the property that has been embezzled can be traced through computer-initiated wire transfers.
To protect yourself from embezzlement, particularly if you are an employer, you should be on the look out for warning signs such as delays in bank deposits and documents that have gone missing. Regular account reviews should be undertaken to look for things such as drops in profits, duplicate payments, outstanding bills, and differences in accounts payable and receivable. Some of the other tell take signs are big increases in business with one customer, and missing petty cash. The most obvious signs are if your employee is overspending on luxury items, or has the same address as the vendor!
Accounting discrepancies are often the key evidence in the felony embezzlement (whether the defendant is charged with a felony varies by state). The recovery of records as swiftly as possible, and organizing them in a coherent fashion, is key to building a strong case. Often it is the case that an employer discovers the evidence, and then has to determine whether to manage the issue internally, file a civil suit, or deliver the evidence to the pubic authorities.